US Premium Segment Stalls as Smartphone Market Weakness Continues in Q1

The US market continued its downward sales trend in February.  Apple is holding its market share in a declining US market, but volume mix is shifting to older devices.    

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April 2, 2019

Smartphone sell-through in the US market fell 9% year-on-year (YoY) in February to 12.1 million units, according to the latest research from Counterpoint’s Market Pulse service. This is the 15th consecutive month of YoY decline in sales.

While sales in the premium segment slowed down sharply, the bright spot was a YoY volume gain for Motorola, Alcatel, Nokia HMD, and Google.

YoY Change in US Premium Market Segment Feb 2018 - Feb 2019

Commenting on the slowdown, Research Director Jeff Fieldhack, stated, “The premium smartphone tier of US$800 wholesale price and above has lost share. In 2019, only 11% of US smartphone volumes were from the US$800 plus price tier as compared to 32% in February 2018. Much of this drop-off is due to Apple’s volume mix shifting to lower price tiers more quickly this year. This suggests that the XS Max and XS devices will disappoint in 2019.”

The low-tier smartphone segment also weakened in 2019 as it did not receive the usual bump in February from tax season sales. Commenting on February sales, Research Analyst Maurice Klaehne said, “Compared to last year, store traffic and sales from prepaid channels were down in February. Walmart and Metro prepaid channels were the weakest in YoY terms. The US government shutdown delayed tax rebates and the tax season buying period. Walmart was the largest disappointment since the retailer dropped phone prices across much of their line-up and had aggressive tax season incentives. E-commerce sales were up 35%, but mobile sales were down.”

For more details, please look here for sell through details and here for quarterly results.

Background:

Counterpoint Technology Market Research is a global research firm specializing in detailed industry analysis of the TMT sectors. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of over 15 years in high tech industries.

Analyst Contacts:

Jeff Fieldhack +1 858 603 2703

[email protected]

Maurice Klaehne

+1 917 679 4038

[email protected]

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